86
N. Kidunduhu
This section will thus examine the actuality, dilemma and hurdles
African countries face in attaining sustainable development within the
meaning of the Kyoto Protocol and the Paris Agreement.
3.3.1 Hydrocarbon Reserves
From the statistics in Sect. 3.2, it is evident that the continent is heavily
endowed with hydrocarbon reserves.
60 Oil and gas companies consider
Africa to be a frontier continent owing to its huge share of unexplored
resources.
61 Indeed, many African countries have recently made discoveries of substantial oil, gas and coal reserves.
62 Oil, gas and coal are,
in fact, the most significant components of Africa’s energy demand. Oil
remains the major fuel utilized in the transport and petrochemical sectors
while gas and coal are utilized for power generation with coal being the
cheapest fuel for baseload generation.
63 In urban centres, the gas takes
the place of biomass for cooking purposes.
64
Many of the fossil fuel exporting African countries rely on the rents
derived therefrom to fund government budgets or supplement budget
deficits—there is a considerable public debate about utilizing revenues to
meet budget deficit but as long as there is a commitment to responsible
public financial management countries ought to have the flexibility to
adapt their use of revenues as circumstances change. The countries that
have just made discoveries are also looking to employ the income from
trading these discoveries in the self-same way. African countries are thus
faced with the conundrum of either electing to capitalize their reserves
or to sink money in domestic reduction measures. Invariably, the balance
of political expediency tilts in favour of the former.
Capitalizing the reserves also averts the risk of stranded assets—
resources that prematurely written down or converted to liabilities before
60 Ibid. (n 10).
61 BP, ‘The Future of Oil: Seizing the Advantage’, https://www.bp.com/en/global/corporate/
news-and-insights/bp-magazine/james-dupree-interview-bp-upstream-portfolio-advantaged-oil.
html, accessed 2 September 2019.
62 Ibid. (n 23).
63 Ibid. (n 19).
64 Ibid.
N. Kidunduhu
This section will thus examine the actuality, dilemma and hurdles
African countries face in attaining sustainable development within the
meaning of the Kyoto Protocol and the Paris Agreement.
3.3.1 Hydrocarbon Reserves
From the statistics in Sect. 3.2, it is evident that the continent is heavily
endowed with hydrocarbon reserves.
60 Oil and gas companies consider
Africa to be a frontier continent owing to its huge share of unexplored
resources.
61 Indeed, many African countries have recently made discoveries of substantial oil, gas and coal reserves.
62 Oil, gas and coal are,
in fact, the most significant components of Africa’s energy demand. Oil
remains the major fuel utilized in the transport and petrochemical sectors
while gas and coal are utilized for power generation with coal being the
cheapest fuel for baseload generation.
63 In urban centres, the gas takes
the place of biomass for cooking purposes.
64
Many of the fossil fuel exporting African countries rely on the rents
derived therefrom to fund government budgets or supplement budget
deficits—there is a considerable public debate about utilizing revenues to
meet budget deficit but as long as there is a commitment to responsible
public financial management countries ought to have the flexibility to
adapt their use of revenues as circumstances change. The countries that
have just made discoveries are also looking to employ the income from
trading these discoveries in the self-same way. African countries are thus
faced with the conundrum of either electing to capitalize their reserves
or to sink money in domestic reduction measures. Invariably, the balance
of political expediency tilts in favour of the former.
Capitalizing the reserves also averts the risk of stranded assets—
resources that prematurely written down or converted to liabilities before
60 Ibid. (n 10).
61 BP, ‘The Future of Oil: Seizing the Advantage’, https://www.bp.com/en/global/corporate/
news-and-insights/bp-magazine/james-dupree-interview-bp-upstream-portfolio-advantaged-oil.
html, accessed 2 September 2019.
62 Ibid. (n 23).
63 Ibid. (n 19).
64 Ibid.